AMMAN — Capitalising on the Kingdom's energy potentials still tops the government's list of priorities, with several new projects expected to see the light of day within a few years, transforming Jordan into an energy-producing country, a minister said Saturday.
Acknowledging that Jordan's consumption of electricity and fuel is among the highest in the world, increasing each year by 5.5 per cent and 7.5 per cent respectively, Energy Minister Alaa Batayneh said the strategic reserves of some fuel derivatives only cover the country's needs for two weeks.
"The energy sector is still subsidised by millions of dinars… diesel alone is subsidised by JD220 million," the minister told reporters during a press conference organised by the Jordan Press Association for the government's economic team.
Noting that the latest hike in prices of 90- and 95-octane gasoline are still "within the range they stood at in the end of last year", he said the taxes imposed on the two grades of petrol are 22 per cent and 40 per cent respectively.
"We managed to receive some revenues by amending the prices of 95-octane and there is a possibility of reconsidering the prices depending on changes in the cost of crude oil on the international market," he said.
Noting that people "mistakenly" think that the price of an oil barrel is the only determinant for pricing fuel, the minister underlined that Jordan had adopted an internationally acknowledged mechanism to calculate oil prices locally, which takes into account the costs of sea transportation, storage and marine insurance, among other factors.
Batayneh said the recently adopted electricity tariffs still cover half the generation costs.
"Citizens only pay 50 per cent of the real electricity prices."
He also said that Jordan does not buy oil at preferential prices from any country, even Iraq.
"We only import 10,000 barrels of oil from Iraq each day, which only cover 10 per cent of our needs and after calculating the transportation costs and insurance bill, the costs become only $5 less than the market price," the minister highlighted.
He also denied that Jordan purchases oil from Saudi Arabia through Aramco at preferential prices.
Commenting on the situation of the Egyptian gas supply, Batayneh said Cairo now barely provides 24 million cubic feet (mcf) of natural gas a day, instead of the 157mcf agreed upon this year, and sometimes "we receive nothing from them".
"This costs us $5 million a day," he added.
The minister highlighted projects that Jordan is embarking on to exploit oil shale and import oil from Iraq.
Jordan recently reached an agreement with Estonian-Malaysian consortium Enefit to construct a 460-megawatt oil shale power plant within the next four years, in what is to be the first electricity station utilising the alternative energy resource in the entire region.
Responding to news reports that an oil pipeline will be established between Jordan and Iraq, Batayneh said this is a Jordanian proposal that was presented to Iraq around a year ago.
The two countries have signed a memorandum to this effect that was endorsed by the Cabinet lately.
"The memorandum only entailed forming technical committees to conduct a feasibility study for the pipeline… we heard lately that Iraq has finally agreed on it, but we still haven't been formally informed about it yet," he said.